North London preparing PFI bid for 439m waste plan

Councillors within the North London Waste Authority are meeting next week (June 27) to discuss the project, and with their approval an outline business case could be submitted to Defra in October.

The Authority has already sent the Department for Environment, Food and Rural Affairs an expression of interest for PFI support under round two of the Waste Infrastructure Development Programme (WIDP).

It has yet to decide on the technology it will use to treat residual waste or which sites the facilities will be built on.

If the project goes ahead, construction would begin in early 2011/2012 with facilities operating by December 2014, most likely under a waste disposal contract lasting 25-30 years.

However, in an officers' report prior to next week's meeting, councillors are advised of possible delays because of the challenging timescale of the project “given the wide-ranging issues that need to be resolved over the coming months”.

“The aim will be to minimise any further impact on the timetable as additional delays will make it increasingly difficult to have new facilities ready on time,” the report said.

The report suggests that including facilities needed in the short-term, as well as new recycling and composting facilities, that as much as £638 million in new investment could be needed, including land purchases.

Under new criteria set for the Private Finance Initiative, however, government credits are only being supplied for residual waste treatment plants.

Credits

Consultants working on behalf of the authority have suggested 50% of the capital costs might be secured through PFI credits from the government – representing a £219.5 million package from the public purse.

The Authority is still to discuss the future of its joint-owned waste management company, LondonWaste Ltd, with the company's co-owner SITA UK.

Within the outline business case to be submitted to Defra, the Authority will have to show how its seven constituent boroughs – Barnet, Camden, Enfield, Hackney, Haringey, Islington and Waltham Forest – will use legally-binding agreements to achieve targets.

It will also have to investigate possible opportunities for working with neighbouring disposal authorities as well as the community sector, and provide analysis of any preferred treatment technologies and potential sites.

The Authority may also have to carry out a soft market testing exercise to identify outlets for any refuse-derived fuel the might be produced by treatment processes.

Costs

Serving a population of 1.65 million and more than 700,000 households, the North London Waste Authority disposes of almost one million tonnes of waste each year. While it makes use of the Edmonton incinerator to deal with 450,000 tonnes per year, around 400,000 tonnes of waste is sent each year to landfill sites in Bedfordshire, Cambridgeshire and Hertfordshire.

The Authority met its recycling targets in 2005/06 with a 20% recycling and composting rate, partly thanks to its 30,000 tonne-per-annum in-vessel composting plant at Edmonton.

External consultants have predicted that the authority's waste disposal and treatment costs will double from £47 million in 2007/07 to a possible £96 million by 2016/16.

The Authority has agreed to recruit extra staff including a procurement director and financial and legal advisors to make sure “the best possible deal” is secured.

It added: “The impact of this change in the scale of activity of the North London Waste Authority cannot be underestimated with a shift from what is a relatively small operation with no capital programme to one which will have to manage very large capital investment and procurement activities.”

MBT

Developers in Brent Cross are hoping to build a mechanical biological treatment (MBT) plant that could also include a materials recycling facility. The development will require the relocation of the Hendon waste transfer station, and if the MBT plant is to be used by the Authority it will need to go through an EU procurement process.

Developers Brent Cross Cricklewood are aiming to submit an outline planning application to the London Borough of Barnet this autumn.